Value of Agricultural Commodities Produced

   Page tools: RSS Feed RSS Bookmark and Share Search this Product

    NAME OF ORGANISATION
    Australian Bureau of Statistics (ABS)

    OVERVIEW
    The objective of the Value of Agricultural Commodities Produced (VACP) collections is to calculate an annual value of the agricultural commodities produced in Australia by understanding the volume of commodities produced and the price achieved both at the farm gate (local value) and in the wholesale market (gross value) for the production.

    The purpose of the VACP collection is to provide an estimate of the value of agricultural production in Australia by industry and by sub-state geographical areas (Statistical Area 4 (SA4) and Natural Resource Management region (NRM) in survey years, and to Statistical Area 2 (SA2) in Agricultural Census years).

    The price data are collated for each commodity and an average price is built for each of these commodities, for each state, to derive a set of weighted average prices, which are applied to production data from the annual agricultural survey to generate value of agricultural production estimates.

    Gross value is the value of production at the point of sale (i.e. where it passes out of the Agriculture sector of the economy). Local (basic) value is the value of agricultural commodities at the point of production. For the portion of the production not marketed (e.g. cereals and hay grown on farm for own use), estimates are made from the best available information and in general are valued on a local value basis.

    Marketing costs are defined as the costs of moving agricultural commodities from the point of production (farm) to the point of sale. Local value is derived by subtracting the marketing costs from Gross value.

    The publications contain information on the VACP compiled annually for all States and Australia. They include Gross and Local values of production for all agricultural commodities: unit gross values of selected commodities; gross value of production of selected commodities classified by industry of the producing establishment; and indexed (Chain Volume Measures) of production.

    PURPOSE
    Value of Agricultural Commodities Produced (VACP) estimates are used by a number of different sections within ABS National Accounts Branch for use in the estimation of the gross farm product component of the Gross Domestic Product and in the estimation of the farm unincorporated income component of the Total Unincorporated Income. The Input Output section relies on the VACP series to provide information about the supply of agricultural commodities at approximate basic values and at "purchasers prices" for incorporation in the input output tables. There is no alternative source currently available for use in the above estimates.

    Data is also used by the State Departments of Agriculture in policy formulation, by the Australian Bureau of Agricultural and Economic Resources and Sciences (ABARES) for benchmarking purposes for the production of trends and forecasts for the Agricultural sector and by the Department of Agriculture (formerly Department of Agriculture, Fisheries and Forestry (DAFF)) as input for the estimation of the Balance of Payments statistical series. The Department of Agriculture also use the estimates as input to the formulation of policies regarding the level of funding for Research and Development grants to industry bodies.

    The Agriculture Statistics program uses the VACP series in the calculation of the current year weighted average of unit values for individual commodities. This is essential to the calculation of the Estimated Value of Agricultural Operations (EVAO) for each unit to obtain a measure of the size and type of activity undertaken by each establishment.

    SCOPE

The scope and coverage of the 2013-14 VACP price collection will be consistent with previous VACP price surveys.

The scope of the VACP price collection is traders of agricultural commodities such as wholesalers, processors, and manufacturers who buy or trade the commodities for, or from agricultural businesses and includes:

        grain traders;
        other broadacre crop buyers;
        sugar mills;
        cotton ginners;
        egg producers;
        nurseries;
        fruit and vegetable wholesalers and factories;
        freight companies;
        packaging manufacturers; and
        other agricultural service providers.
Coverage of the VACP price collection is good, based on the volume of commodities traded compared with the estimates of production (from the annual agricultural survey). Coverage of the major cereal grains, rice, sugar, livestock, dairy and wool is at, or close to 100%. Other commodities are more difficult to measure; quantity information is not always available with pricing information. VACP price collection is a census of all units on the VACP frame (approximately 400 units).

The reference period for the 2013-14 VACP collection is the financial year ending 30 June 2014.

The frame for VACP price collection is partially created by the REASB using data extracted from the Business Register. It is maintained and supplemented with industry research utilising the Internet, Journals, newspapers etc. to ensure that coverage is kept up to date. This frame is re-used and updated each year, with changes made to reflect current business operations.



    DATA DETAIL

    Conceptual framework
    The Value of Agricultural Commodities Produced (VACP) series is a derived series whereby weighted average market values (unit prices) are applied to the production of commodities as recorded in ABS statistical collections (e.g. the annual agricultural survey, the five yearly Agricultural Census, the Wool Receivals, Purchases and Sales collection, the Livestock Slaughtering collection and Overseas Trade statistics). Exceptions include the production of milk, as recorded by the Australian Dairy Corporation and until recent years State Egg marketing boards recorded egg production. Egg production is now also collected in the annual agricultural survey and Agricultural Census following deregulation of the egg industry in all States.

    Initially value of production estimates were derived in order to provide estimates of what now approximates to Value Added. Value added was calculated by deducting a given range of expenses from the value of production to derive an estimate of an industry's contribution to GDP. Today, however, value of production estimates are presented in absolute terms and the National Accounts branch of the ABS is responsible for the derivation of Value Added.

    Main outputs
    Gross and Local values of production for all agricultural commodities: gross unit values of selected commodities; gross value of production of selected commodities classified by industry of the producing establishment; and indexed (Chain Volume Measures) of production.

    Classifications

    The broad commodity classification are as follows:

    Crops

    • Cereals for Grain
    • Legumes
    • Oilseeds
    • Crops for Hay
    • Other Crops

    Pastures and Grasses
    • Cut for Hay
    • Harvested for Seed
    Fruit (excluding grapes)
    • Orchard Fruit
    • Citrus
    • Pome
    • Stone
    • Nuts
    • Berry and small fruit
    • Other fruit

    Grapes
    • Table
    • Wine
    • Dried

    Vegetables for Human Consumption
    • Various vegetables

    Livestock Slaughterings and Other Disposals
    • Cattle & calves
    • Sheep & lambs
    • Pigs
    • Goats
    • Poultry
    Livestock Products
    • Wool
    • Liquid Whole Milk
    • Eggs

    Other concepts (summary)
    Agricultural commodity - a product produced by the agricultural sector (including livestock and livestock products).

    Agricultural Sector - includes all "commercially" producing establishments with an Estimated Value of Agricultural Operations (EVAO) of $5,000 or more from production of commodities designated as primary to Australian and New Zealand Standard Industrial Classification (ANZSIC) Sub-division 01 "Agriculture".

    Estimated Value of Agricultural Operations (EVAO) - an aggregation of commodity values which takes into account (without double counting) the area of crops sown and numbers of livestock on holdings at a point in time as well as the crops produced and livestock turn-off during the year. It should be noted that EVAO is applicable only for industry coding and size valuation purposes. It is not an indicator of receipts obtained by units or of the value of agricultural commodities produced by these units.

    Establishment - Establishments are agricultural wholesalers/processors/manufacturers who buy agricultural commodities, and businesses who incur marketing costs for these agricultural commodities (e.g. transport, container and storage companies). An establishment unit may process products in a number of locations within a state with products sourced from one or more number of different states.

    Gross value - the value of production at the point of sale (i.e. where it passes out of the Agriculture sector of the economy). It is the value placed on recorded production at wholesale prices, realised in the market place.

    Local (basic) value - the value of agricultural commodities at the point of production. Local value is derived by subtracting the marketing costs from Gross value. Marketing costs are defined as the cost of moving agricultural commodities from the point of production (farm) to the point of sale.

    Gross and Local values of agricultural commodities produced involve some duplication, as they include certain agricultural commodities which are consumed as raw materials to produce other agricultural commodities (e.g. hay consumed by livestock).

    Average Gross Unit Values - are calculated by dividing the gross value of each commodity produced by the total production of each corresponding commodity.

    Livestock slaughterings and other disposals - includes two components:
      - Value of livestock slaughtered
      - Other disposals (which is the sum of the value of livestock exported overseas whether for slaughter or breeding, minus the value of imports of livestock, plus net interstate transfers (exports from State less imports into State) of animals intended for slaughter where available (now only between NT and adjacent states).

    Marketing Costs - the cost of moving agricultural commodities from the point of production (farm) to the point of sale (the market place), including freight, cost of containers, commission, insurance, storage, handling and other charges necessarily incurred by the producer in delivering commodities to the market place. Marketing costs are not on a completely comparable basis between states and in addition, accurate information is difficult to obtain for many items. As a consequence, differences between states in the relationship of local to gross value should be regarded with some caution.

    Market Place - the point(s) of valuation of a commodity where ownership of the commodity is relinquished by the agricultural sector as defined for Value of Agricultural Commodities Produced (VACP) purposes. In general this is the metropolitan market in each state. Where commodities are consumed locally, or where they become raw material for a secondary industry, these points are presumed to be the market place.

    Recorded Production - production as recorded in ABS statistical collections (e.g. the Agricultural Census, the Wool Receivals, Purchases and Sales collection and Overseas Trade and Manufacturing Sections statistics). Exceptions include the production of Milk as recorded by the Australian Dairy Corporation.

    Reference Period - for most crops this refers to the season ended 30 June. However, production is valued for those summer crops, orchard fruit and vegetable crops where the harvesting period extends beyond 30 June. Livestock slaughterings and other disposals relate to 30 June. For all commodities, values are in respect of production during the financial year irrespective of when payments are actually made.

    GEOGRAPHIC DETAIL
    Australia
    New South Wales
    Victoria
    Queensland
    South Australia
    Western Australia
    Tasmania
    Northern Territory
    ACT

    Comments and/or Other Regions
    VACP estimates are available by industry and by sub-state geographical areas. Since migrating to the Australian Statistical Geography Standard (ASGS) in 2011, data is available at National, State, Statistical Area 4 (SA4) and Natural Resource Management region (NRM) in survey years, and at Statistical Area 2 (SA2) in Agricultural Census years.

    COLLECTION FREQUENCY
    Annually

    Frequency comments
    Estimates are calculated twice per year: Preliminary Estimates and Final Estimates.

    COLLECTION HISTORY
    For 1989-90 and 1990-91 crop estimates were based on production from farms having a minimum Estimated Value of Agricultural Operations (EVAO) of $20,000.
    For 1991-92 and 1992-93 crop estimates were based on productions from farms expected to have an EVAO of $22,500 or more.
    From 1993-94 estimates have been based on EVAO of $5,000 or more. Estimates from 1993-94 onwards are therefore not strictly comparable with data in previous publications.

    DATA AVAILABILITY
    Yes

    Data availability comments
    Data is released annually.
    Collection is a continual process.
    Preliminary figures released in the November following the reference period.
    Final figures released in the following May/June.


    DATE OF LAST UPDATE FOR THIS DOCUMENT
    09/09/2014 08:20 AM